The AirAsia Group which includes AirAsia Malaysia and all other AirAsia subsidiaries has recently released its financial results for the second quarter of 2021. While things remain sluggish, there were so many improvements, and notable of them was the load factor. The AirAsia group achieved a load factor of 68% during the quarter, led by AirAsia Philippines at 78%!
AirAsia Malaysia, AirAsia Indonesia, and AirAsia Thailand experienced subdued load factor momentum due to rising Covid-19 cases in their respective domestic markets.
AirAsia Philippines saw a 2% increase in the number of passengers carried and an improvement of 4 percentage points in load factor.
Other notable improvements are:
- Completion of the transformation into a digital travel and lifestyle group.
- Revenues are up by 161%
- Sufficient liquidity for the second half of 2021 and 2022
- Achieving the highest hygiene and safety standards as air travel slowly resumes.
Unaudited Consolidated Second Quarter 2021 Results of AirAsia Group Berhad
Amidst the onslaught of the pandemic, AirAsia Berhad’s group revenue has increased by 161% year-on-year equivalent to RM371million. The move to digital travel has also shown its benefits. Digital businesses reported stronger revenue, up 147% YoY led by contributions from Teleport, which tripled its revenue YoY driven by a higher number of cargo-only flights and deliveries.
A quick summary of AirAsia Berhad’s second-quarter financials:
- 2Q2021 revenue of RM371 million, higher by 161% year-on-year (“YoY”) and 24% quarter-on-quarter (“QoQ”)
- Aviation revenue declined 8% QoQ but increased 176% YoY off a low base
- EBITDA loss was RM207 million for the quarter, which narrowed by 70% YoY and 5% QoQ.
- Airasia Super App reported strong revenue growth of 39% YoY, attributed to new product offerings and commissions.
- BigPay posted significant growth in revenue, up 56% YoY driven by payments and remittances.
Aviation operating expenses were also narrowed by 54% year-on-year due to active capacity management and concentration on flying the most profitable routes as well as lease restructuring, asset optimization, and targeted cost control.
Operating & Market Share Performance
Key operational metrics improved significantly YoY for all four entities, on the back of a low base in 2Q2020. As for QoQ performance, AirAsia Philippines progressed steadily with a 2% increase in the number of passengers carried and an improvement of 4 percentage points (“ppts”) in load factor, to reach a commendable 78%, while AirAsia Indonesia’s load factor increased by 11 ppts. Revenue per ASK (“RASK”) for the Consolidated Group was flat at 15.93 sen during the quarter, while load factor was firm at 68%, 9 ppts higher YoY, supported by active capacity management.
Cost Performance
Airline operating expenses for 2Q2021 were reduced by 54% YoY while fixed costs were efficiently reduced by 15% YoY despite a low base in 2Q2020. The reduction was flat on a QoQ basis. Airline staff costs declined the most by 48% YoY and 19% QoQ, contributed by headcount rationalization, salary cuts, and natural attrition. User charges and other related expenses were reduced by 53% in line with lower traffic. The adoption of contactless procedures and digital check-in processes also aided to result in lower ground-handling costs.
“The Group posted a healthy load factor of 68% during the quarter, up 9 ppts attributed to active capacity management to match demand. This is led by AirAsia Philippines with 78% load factor during the quarter. AirAsia Malaysia, AirAsia Indonesia and AirAsia Thailand experienced subdued momentum QoQ due to rising Covid-19 cases in their respective domestic markets. Nonetheless, passenger numbers improved YoY with AirAsia Malaysia reporting a 64% increase YoY while AirAsia Indonesia, AirAsia Philippines and AirAsia Thailand each increased by more than 100% YoY.
“We continued to see positive outcomes from our stringent cost containment measures. Our 2Q2021 fixed costs reduced 15% despite coming off a low base. On a QoQ basis, fixed costs were flat after a consistent QoQ downtrend since the first Covid wave in late 1Q2020. Airline staff costs were down 48% YoY and another 19% QoQ due to headcount rationalisation & attrition. We reported zero fuel hedging losses, which will remain nil in the upcoming quarters as it has been fully restructured.”
Bo Lingam, AirAsia Group Berhad President
“Our transformation is over and AirAsia Group Berhad is now an investment holding company with a portfolio of synergistic travel and lifestyle businesses that leverage data and technology to deliver the best value at the lowest cost, supported by strong data and one of Asia’s leading brands that remains committed to serving the underserved.
“Innovation has always been in our DNA and we will continue to develop and expand our products and services to meet consumer demand in all of our key markets.”
Tony Fernandes, AirAsia Group Berhad CEO
